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JOINT CIRCULAR No

JOINT CIRCULAR No. 06/1999/TTLT-BTC-TCHQ OF JANUARY 15, 1999 GUIDING THE DEBT SETTLEMENT, COLLECTION OF ARREARS OF EXPORT TAX, IMPORT TAX AND SPECIAL CONSUMPTION TAX ON IMPORT GOODS AND OF FINES ON LATE PAYMENT THEREOF

Following the Prime Minister’s direction in official dispatches No.1150/CP-KTTH of September 28, 1998 and No. 6430/KTTH of February 15, 1997 of the Government on the collection of import and export tax arrears and settlement of import and export tax debts; the Ministry of Finance and the General Department of Customs hereby jointly provide the following guidance:

I. COLLECTION OF IMPORT AND EXPORT TAX ARREARS:

Tax arrears and/or fines which must be collected after having been found out in import-export declarations already registered with the customs agencies before October 15, 1998 shall be dealt with as follows:

1. For cases of violations by enterprises (even where the customs agencies have inspected import-export goods, calculated and collected taxes; and the enterprises have sold out goods and made final settlement of profits and losses...), the customs agencies of the localities where the enterprises fill import-export procedures shall have to fully collect tax arrears and fines according to the current provisions of law. Acts of violations include:

- Falsely declaring the import and/or export tax calculation prices.

- Falsely declaring the names of actually imported or exported goods.

- Falsely declaring the quantity, categories, quality and grade, origin... of import-export goods;

- Failing to fully supply dossiers related to import-export goods lots which shall serve as basis for the customs agencies to inspect the goods or calculate taxes;

- Other violations by enterprises, that lead to the collection of tax arrears.

2. For cases of violations due to objective causes, not at the enterprise’s faults, such as the ambiguity and inadequacy of regulations; the absence of guiding documents or due to the faults of customs officers/personnel..., they shall be handled as follows:

- The General Department of Customs shall direct the provincial/municipal Customs Departments to inspect case by case, clearly justifying the reasons for retrospective collection and make a sum-up report on all relevant dossiers then submit it to the General Department of Customs.

- Basing itself on the inspection results and reports of the provincial/municipal Customs Departments, the General Department of Customs shall make a sum-up report and send it to the Ministry of Finance, requesting the latter to consider and handle case by case.

Customs officers and personnel who commit acts of violation thus causing losses to the State budget shall, depending on the seriousness of their violations, be sanctioned according to the provisions of law.

II. SETTLEMENT OF IMPORT-EXPORT TAX DEBTS:

Import-export tax debts reflected on the registration declaration forms and customs’ tax notices before October 15, 1998 shall be handled as follows:

1. For operating enterprises which still owe import-export tax debt, the customs agencies of the localities where the debtors-enterprises are located shall request them to come and fill procedures for comparison and certification of their import-export tax debt amounts (as for dissolved or merged enterprises and/or split enterprises, the agencies accepting the merged enterprises or the immediate higher-level agencies of the split enterprises shall have to fill procedures for the comparison and certification of the payable import-export tax amounts with the customs agencies. For cases where an enterprise is split into a number of new ones, the document of comparison must state clearly the names of the after-split enterprises, which shall have to pay the old debts and the concrete payable amounts, according to each specific import-export declaration of each enterprise. Basing themselves on the documents of comparison and debt certification, the customs agencies shall urge the concerned enterprises to pay tax debts to the State budget as prescribed.

For enterprises owing tax debts due to objective causes, which are entitled to the debt extension or freezing as permitted by the Government and the Ministry of Finance, they shall, by the end of the debt-extension or debt-freezing time-limit, still have to make comparison of the outstanding debts so as to pay them to the State budget in strict compliance with the regulations.

All cases of failing to pay taxes according to the regulations shall be subject to coercive measures as currently prescribed by law.

2. For the already dissolved or bankrupt enterprises which have stopped their operations, their superior agencies and/or the agencies issuing decisions on the dissolution of such enterprises shall direct the liquidation boards for the dissolution of enterprises or the property liquidation groups (for the bankrupt enterprises) to settle the dissolved or bankrupt enterprises’ debts in strict compliance with the order of priority stipulated in Article 39 of the Law on Bankruptcy of Enterprises dated December 30, 1993 and Point 6, Item III, Circular No. 25-TC/TCDN of May 15, 1997 of the Ministry of Finance guiding the order, procedures and principles for financial settlement when State enterprises are dissolved.

If the value of the remaining properties of enterprises is not enough for the payment of import-export tax debts, the provincial/municipal Customs Departments shall coordinate with the liquidation boards for the dissolution of enterprises and the Departments for the Management of the State’s Capital and Property at Enterprises in conducting inspection and sending reports thereon (attached with dossiers) to the General Department of Customs before March 31, 1999 so that the latter may propose the Ministry of Finance to further report to the Prime Minister.

For operating enterprises which owe irrecoverable import-export tax debts due to force majeure causes, the provincial People’s Committees (for locally-run enterprises) or the parent ministries (for centrally-run enterprises) shall inspect case by case and send reports thereon (enclosed with dossiers) to the General Department of Customs before March 31, 1999 so that the latter may propose the Ministry of Finance to further report to the Prime Minister.

3. Enterprises owing debts related to taxes on the lots of goods consigned for import and/or export by other enterprises shall be dealt with as follows:

3.1. Where an enterprise owes debts related to taxes on the lots of import or export goods consigned by another enterprise, the customs agency at the locality where the debtor- enterprise is situated shall fill procedures for the transfer of the tax-related debts to the enterprise that has consigned goods for import and/or export so as to monitor and urge the collection of outstanding debt, provided that there’s a written certification of tax debts between the two enterprises according to each specific declaration of consigned import-export goods and the enterprise with goods consigned for import and/or export must be the one permitted to engage in direct import and/or export activities.

The enterprise having goods consigned for import and/or export shall also have to pay taxes and be subject to coercive measures if committing violation(s), as stipulated in Item 1, Part II of this Circular.

3.2. In cases where an enterprise is owing debts related to taxes on the lots of goods consigned by another enterprise for import and/or export, but the consigning enterprise has been dissolved or bankrupt and the value of its remaining properties cannot cover the tax debt payment for the lots of consigned import-export goods, the settlement shall comply with the provisions of Item 2, Part II of this Circular.

4. For debts related to taxes on the lots of goods temporarily imported for re-export; the import of raw materials and materials for the production of export goods, which have actually been exported after the prescribed tax payment time-limit, the customs agencies shall write off the tax debts corresponding to the amount of goods already exported. The procedures for consideration of debt clearance shall comply with the procedures on the non-collection of taxes on goods temporarily imported for re-export, goods imported for the production of export commodities which have actually been re-exported within the import tax- payment time-limit.

III.- FINES ON THE LATE TAX PAYMENT:

By the end of October 15, 1998, if enterprises have fully paid tax arrears for each import-export declaration, such enterprises shall not have to pay fines on the late payment of taxes, corresponding to the tax amount already paid for each specific import-export declaration.

The General Department of Customs shall guide and direct the provincial/municipal Customs Departments to fill procedures for the above-said fine exemption, make a sum-up report thereon and submit it to the General Department of Customs and the Ministry of Finance.

IV. OTHER PROVISIONS:

1. The provincial/municipal Customs Departments shall still proceed with customs procedures for enterprises which are subject to coercive measures in the following cases:

- The enterprises export goods to foreign countries.

- The enterprises import raw materials and/or materials for the production of export goods or goods processing under contracts signed with foreign parties (except for cases where they have exported all contracted products or the contract-liquidation duration has expired and where despite the customs agencies’ request, the concerned enterprises still fail to fill the tax settlement procedures); and the enterprises trading in goods temporarily imported for re-export; or transport across borders.

- The enterprises owing tax debts (including the to be- collected tax arrears) have registered the plan on the full payment of tax debts (before December 12, 1998. For enterprises with the tax debt amount reaching more than 2 billion VN dong, the maximum time-limit must not go beyond June 30, 1999) on the monthly basis with the customs agencies of the localities where the debtors- enterprises are situated and strictly abide by the already registered debt payment plan.

2. In the course of collecting import-export tax arrears and settlement of import-export tax debts, if any enterprise is detected as having deliberately delayed the tax payment or committed acts of obstructing forces on duty for the purpose of appropriating tax money of the State budget, the provincial/municipal Customs Departments shall compile dossiers, make reports and send them to the General Department of Customs so that the latter may further report to the Prime Minister. Depending on the seriousness of violations of the concerned enterprises, the General Department of Customs shall propose that such enterprises be subject to administrative sanctions or examination for penal liability.

3. The debt settlement, the collection of arrears of the special consumption tax on import goods as well as the fine on the late payment thereof shall also comply with the provisions of this Circular.

4. This Circular takes effect after its signing. All earlier regulations contrary to this Circular shall be annulled.

The General Department of Customs shall direct the provincial/municipal Customs Departments to uniformly implement the provisions in this Circular.

In the course of implementation, if any problems arises, the concerned units should quickly report them to the Ministry of Finance and the General Department of Customs for study and timely handling.

For the General Director of Customs

Deputy General Director

NGUYEN VAN CAM

For the Minister of Finance

Vice Minister

PHAM VAN TRONG